Summary: A private property gauge reported that new-home prices in 100 Chinese cities dropped 0.04% month-on-month in February, erasing a 0.18% gain recorded in January and recording the largest monthly decline since December 2022. The data points to persistent stress in the housing market even as local and national authorities roll out support measures.
Data from China Index Academy, one of the countrys largest property research firms, showed that new-home prices across 100 cities slipped 0.04% in February compared with January. That result reversed a 0.18% increase the month before and represented the steepest monthly fall since December 2022.
Official price statistics for 70 cities are scheduled for release on March 16. Those official series have not shown a month-on-month increase since May 2023, underscoring the durability of the downturn.
The sustained weakness in the property market has eroded household wealth and weighed on consumption in the worlds second-largest economy, the survey noted. Demand has remained subdued despite rounds of policy support since the sector entered crisis in 2021, including measures such as looser purchase rules and reduced down-payment requirements.
At the local level, Shanghai last week announced steps to relax home purchase restrictions. The package allows eligible buyers to buy additional properties and permits access to higher mortgage limits. Authorities and analysts say such moves can provide some near-term stimulus to activity.
"Such measures could offer a short-term boost to the market, but cannot reverse the broad down-cycle," said Larry Hu, head of China economics at Macquarie Group, in a research note last week. "Given the housing bust with home prices falling to the level in 2016, reversing such a trend would require much stronger policy intervention to reset market expectations," Hu said, adding that he did not expect policymakers to introduce "unconventional measures" at this stage.
Overall, the February reading from China Index Academy reinforces the view that the property sector remains a drag on the broader economy. The combination of lingering price declines, cautious buyer demand and only incremental policy loosening has left the market searching for a sustainable bottom.
Market participants will be watching the official 70-city data due mid-March for confirmation of the private surveys findings and for any sign that policy adjustments are beginning to alter the trajectory of prices.